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3 Stocks in Focus on Biden's $2.5B Grant for US EV Chargers

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While his predecessor Trump’s views on climate policies were rather controversial, Joe Biden considers climate change as one of the top priorities of his administration. Since he took the oath as the 46th U.S. President in January 2021, Biden has signed a slew of environmentally focused executive orders to strengthen the nation’s leadership in tackling climate crisis. Biden is optimistic about the power of green vehicles to battle climate concerns. Keeping up with his stance to bring green vehicles into the mainstream, the President is expanding the network of electric vehicle (EV) charging across the United States.

Yesterday, the Biden administration announced $2.5 billion in new grants to speed up the creation of EV charging stations and alternative fueling infrastructure in underserved neighborhoods and communities. Dubbed as the Charging and Fueling Infrastructure (CFI) grant program, the funding will spur Biden’s goal of establishing a network of 500,000 public EV charging stations across the country by 2030 in an attempt to cut greenhouse gas emissions by at least 50% by the decade end.

The $2.5 billion fresh funding will be doled out over a period of five years and will be split evenly into two parts. It comprises a $1.25 billion Community Program, which aims at building chargers for underserved locations in cities and communities. The other $1.25 billion Corridor Program would seek to establishing alternative fuel corridors for gasoline-free cross-country travel and long-haul trucking.

The $2.5 billion funding builds on $5 billion already earmarked for the National Electric Vehicle Infrastructure program to establish a nationwide network of EV chargers specifically along highways.Per the Department of Transportation, the fresh grants seek to “fill gaps in the national charging and alternative-fueling network.” Transportation secretary Pete Buttigie views this $2.5 billion funding as “another big step forward in creating an EV future that is convenient, affordable, reliable, and accessible to all Americans.” Quoting energy secretary Jennifer Granholm, "Extending EV charging infrastructure into traditionally underserved areas will ensure that equitable and widespread EV adoption takes hold.”

To capitalize on the massive EV push and the fast rollout of the charging infrastructure, it makes sense to keep a close watch on a few charging stocks like EVgo (EVGO - Free Report) , Blink Charging (BLNK - Free Report) and ChargePoint Holdings (CHPT - Free Report) . Before delving into the stocks, let’s glance through the prospects of the e-mobility space and the charging domain.

The Electric Future is Here

While EVs still account for a small share of global vehicle sales, they are poised to lead the transportation space in the coming years. Sales of EVs topped 5% of U.S. new vehicle sales for the first time in 2022. While sales of passenger vehicles declined last year, EV sales in the country shot up 65%. EVs accounted for 5.8% of all new cars sold in the country, marking an increase from 3.1% share in 2021. Per Statista, the U.S. EV market is projected to grow to $139.1 billion by 2027, implying a CAGR of 22.8% during 2023-2027. Legacy automakers are revving up their e-mobility game and prioritizing resources to manufacture EV models over the low-margin traditional vehicles. 

For a sustainable EV future, the widespread availability of charging facilities and deployment of proper charging infrastructure is essential. As we know, EV buyers have long been concerned about batteries and the availability of sufficient charging facilities. But thankfully, the development is taking place at a rapid pace. The charging space is on a roll and much of the credit for that goes to the Biden administration, which is allocating enough funds to support the growth and deployment of EV chargers in the country. According to Energy Department data, the United States had 133,000 public charging outlets across 51,537 station locations as of Mar 14, 2023.

Per, the global EV charging station market size is projected to reach $49.14 billion by 2030 at a CAGR of 36.9% from 2022 to 2030. Mordor Intelligence forecasts the U.S. EV charging systems and equipment market to increase to $7.7 billion by 2027, registering a CAGR of 45% during 2021-2027 timeframe.

Stocks That Warrant Your Attention Now

ChargePoint: This charging company is the market leader in North America in commercial Level 2 AC chargers. It is also actively focusing on expansion into European markets. Currently, ChargePoint has more than 225,000 activated charging ports. The launch of CP6000, ChargePoint’s AC EV charging solution, is boosting CHPT’s prospects. Acquisitions of has·to·be and Viriciti have accelerated CHPT’s position in the EV charging ecosystem. ChargePoint has delivered more than 158 million charging sessions so far.

CHPT currently carries a Zacks Rank #3 (Hold). The Zacks Consensus Estimate for fiscal 2024 sales and earnings implies year-over-year growth of 53% and 30%, respectively. For fiscal 2023, the consensus mark for revenues and EPS indicates a year-over-year increase of 50% and 77%, respectively.

Blink Charging: One of the leading players in the EV charging space, Blink has deployed over 51,000 charging ports across 19 countries. The company is set to benefit from its strategic acquisitions, including Blue Corner and EB Charging, SemaConnect. This transformative deal would enable Blink to gain full control over its supply chain, making it the only EV charging firm providing 100% vertical integration. The firm’s new product offerings, including the Vision, EQ 200, Series 3, PQ 150, and 30kW DC Fast Charger are likely to drive growth.

BLNK currently carries a Zacks Rank #3. The company expects 2023 revenues in the range of $100-$110 million, up from $61.1 million generated in 2022. It is targeting gross profit in excess of 30% for full-year 2023, up from 24.2% in 2022. The Zacks Consensus Estimate for the company’s 2023 and 2024 sales implies year-over-year growth of 67% and 44%, respectively.

EVgo: EVgo is the largest public fast-charging network for EVs in the United States. It is also the first charging firm to be powered by 100% renewable energy. EVGO operates more than 850 charging locations across 30 states and serves more than 500,000 customer accounts. The nationwide launch of Autocharge+ by the firm augurs well as it has simplified the charging experience for drivers. Collaborations with MHX Solutions, Delta Electronics, Lowe and Pilot companies among others augur well and are set to bolster opportunities for EVgo.

EVGO currently carries a Zacks Rank #3. The Zacks Consensus Estimate for 2022 sales and earnings implies year-over-year growth of 120% and 24%, respectively. For the current year, the consensus mark for revenues and EPS points to a year-over-year increase of 181% and 5.3%, respectively.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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